Abstract
Heavy-polluting enterprises play a crucial role in regional pollution control and carbon reduction efforts. This study adopts Finance and Taxation [2018] No. 70 as a quasi-natural experiment, employing a difference-in-differences model to examine the impact of the value-added tax credit refund (VATCR) policy on the environmental protection investment (HEEPI) of 510 heavy-polluting enterprises. The results indicate that the VATCR policy significantly increases HEEPI. After the policy implementation, enterprises facing stricter environmental regulations, possessing higher potential, situated in economically developed regions, and larger in scale exhibit a greater inclination toward HEEPI. Alleviating financing constraints, enhancing core business activities, and reducing operating costs represent potential pathways for augmenting enterprises’ environmental investment. These findings are important for China in dealing with the relationship between business and government in environmental governance and are a valuable reference for other countries.
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